Western Financial Group Adopts Shareholder Rights Plan
WESTERN FINANCIAL GROUP ADOPTS SHAREHOLDER RIGHTS PLAN
High River, Alberta – March 21, 2006, (TSX – WES, WES.DB.A) – Western Financial Group Inc. ("Western Financial Group" or the "Corporation") announced today that its Board of Directors has adopted a Shareholder Rights Plan (the "Plan"), similar to existing shareholder rights plans adopted by other Canadian public companies.
The objectives of the Plan are to ensure, to the extent possible, that all shareholders of the Corporation are treated equally and fairly in connection with any takeover bid for the Corporation. The Plan discourages discriminatory, coercive or unfair takeovers of the Corporation and gives the Board of Directors time if, in the circumstances, the Board of Directors determines it is appropriate to take such time, to pursue alternatives to maximize shareholder value in the event an unsolicited takeover bid is made for all or a portion of the outstanding Common Shares of the Corporation.
In order to implement the adoption of the Plan, the Board of Directors of the Corporation authorized the issuance of one right in respect of each Common Share of the Corporation outstanding at the close of business on March 20, 2006 (the "Record Time"). In addition, the Board authorized the issuance of one Right in respect of each additional Common Share issued after the Record Time. The rights trade with and are represented by Western Financial Group's common share certificates, including certificates issued prior to the Record Time. Until such time as the rights separate from the common shares and become exercisable, rights certificates will not be distributed to shareholders.
If a person, or a group acting in concert, acquires (other than pursuant to an exemption available under the Plan) beneficial ownership of 20% or more of the Common Shares, rights (other than those held by such acquiring person which will become void) will separate from the Common Shares and permit the holder thereof to purchase Common Shares at a substantial discount to their then prevailing market price. A person, or a group acting in concert, who is the beneficial owner of 20% or more of outstanding Common Shares as of the Record Time is exempt from the dilutive effects of the Plan provided such person (or persons) does not increase its beneficial ownership by more than 1% (other than in accordance with the terms of the Plan). At any time prior to the rights becoming exercisable, the Board of Directors may waive the operation of the Plan with respect to certain events before they occur.
The issuance of the rights is not dilutive and will not affect reported earnings or cash flow per share until the rights separate from the underlying Common Shares and become exercisable or until the exercise of the rights. The issuance of the rights will not change the manner in which shareholders currently trade their Common Shares.
The Plan is subject to approval of the Toronto Stock Exchange, and requires confirmation by Western Financial Group shareholders at the Corporation’s annual and special meeting of shareholders to be held on May 11, 2006. If the Plan is not confirmed by shareholders, the Plan and all outstanding rights will terminate and be void and of no further force and effect.
The Board of Directors did not adopt the Plan to prevent a takeover of the Corporation, to secure the continuance of management or the directors in their respective offices or to deter fair offers for the Common Shares of the Corporation.
Western Financial Group is one of the leading western-based financial service companies in Western Canada. With offices in towns and small cities across the West, the Company provides more than 250,000 customers with insurance, investment and banking products through WFG Agency Network, Western Life, and Bank West.
For further information, please contact:
Jodi Greig, Corporate Communications Manager
Western Financial Group